THE price of diesel hit its highest peak at P110 per liter since the Iran war started. Considering that it is the fuel of choice of most mass transport and logistics vehicles, all prices of food and essential commodities will be pulled upwards by the fuel cost. Even gasoline and all petroleum derivatives are at their peaks. The closure of the Strait of Hormuz not only blocked the shipment of petroleum but also natural gas which fuels many power plants. Hence, generation rates are expected to shoot up as well. The drastic spike in food prices, and essential commodities and utilities drive the cost of production and the cost of living further upwards. As production slows down, the strain on the labor force whose wages cannot keep up with inflation worsens the social impact of the crisis.
The unusually lighter traffic along EDSA these days reflects the tightening of belts by the consuming public by reducing the frequency of travel, preferring to do work remotely. Companies began austerity measures to brace for the adverse impacts of economic slowdown caused by the Iran war crisis by reducing electricity and fuel consumption in all aspects of their operations.
Undoubtedly, we must all brace tightly for the short- and long-term devastating impacts of this evolving global crisis and hope that global leadership would come together to bring an end to this man-made madness. But as we say in any crisis, one can find opportunities. Instead of giving in to hopelessness and despair, one must rather grasp at whatever courage that one can muster to survive the incoming blows of the crisis and try one’s darndest best to peek at the lenses of optimism for any hint of opportunity one can exploit to ensure survivability.
One of the opportunities that it presents is the acceleration of the greening of our transport systems. The Iran war drives the world to hasten its transition from fossil fuels to renewables. In the transport systems, the global community, particularly in Asia, people are made clearly aware of the advantages of migrating to the use and ownership of electric vehicles. While there has been a trend in the increase of electric vehicles, the rate of increase was slow and in some other jurisdictions, tepid. In the Philippines, electric vehicles comprise a mere 0.2 percent of the entire 14.56 million registered vehicles across the country as of 2024 data. A mere 6,697 units are fully electric while 17,590 units are hybrid vehicles. It must be noted, though, that the growth in adoption to electric vehicles is five times from 2023 to 2024.
With the entry of cheaper electric vehicles in the market and the gradual increase in deployment of charging stations, the oil crisis is fueling the incentive boost to switch from gas-guzzling cars to electric. This transformation will be led by car users in Metro Manila as the urban density and traffic congestion compels them not to use fossil fuels in their modes of mobility. We expect the likes of Grab, Angkas, and other ride-sharing and logistics companies to make a race to electric vehicle adoption. Mober, with all its entire electric fleet, has a competitive advantage as an early adopter.
With this transformation, we can expect a quieter and cleaner air for Metro Manila. This oil crisis is perhaps an electric shock that our transport community needs to awaken to the reality of how our world has evolved.
Another opportunity is the switch to renewable energy, particularly to solar power. Despite being an earlier technology than electric vehicles, rooftop solar adoption remains below 1 percent among Philippine households. While there is a potential for 20 gigawatts (GW) for rooftop solar in the country, the adoption has yet to accelerate to the level of mass adoption. The speed of adoption coming from a small base cannot yet tip the balance toward exponential growth.
Fortunately, Meralco is championing the race toward renewables when it invested in the biggest solar power plant project in the world. Meralco’s bet on the 3.5-GW Terrasolar project was serendipitous. As the oil crisis rages these days, the Terra Solar project started supplying to the grid to energize millions of homes. A project of this mega-scale is the one our country needs to mitigate the cost of generation against the unforeseen exponential spike in fossil fuels. The timing of its deployment to the grid is nothing but perfect. With its other big bet on small and micro modular nuclear reactors, Meralco further future-proofs the power sector of the country for any future crisis that we may face. Aside from Meralco, there are smaller power generation companies, even microgrids, that are contributing their share to clean energy.
Yes, we are experiencing an oil crisis. But our painful experience gave us a wake-up call to speed up on a clearer and more secure path toward energy security and better cities. On to the march to cleaner energy.
